Instem, a 30-year veteran of the pharmaceutical software industry, this week acquired Cambridge, UK-based life science data-mining firm BioWisdom in a cash and stock transaction valued up to £1.5 million ($2.4 million).
Instem, which is based in Staffordshire, UK, and employs just over 100 people worldwide, acquired the 13-person BioWisdom to add new information-extraction and decision-support capabilities to its current software tools. Privately held BioWisdom will retain its Cambridge headquarters and all of its employees. Gordon Baxter, CEO and founder of the company, has joined Instem as chief scientific officer.
BioWisdom's key offering is its Sofia platform, a text-mining tool that extracts information from unstructured documents and then summarizes key assertions to create so-called Assertional Metadata Intelligence Networks. The company also offers the SRS genomic data-integration platform that it acquired from Lion Biosciences in 2006 and the OmniViz data-visualization software that it acquired from the firm of the same name in 2007.
The company also offers the Safety Intelligence Program, an information network built with Sofia that includes information on the effects of chemicals on various tissues, as well as clinical biomarkers of tissue injury. The SIP currently contains information extracted from more than 19 million documents and database records, comprising nearly 300,000 individual assertions relating to various biological responses induced by more than 20,000 different compounds.
Meantime, Instem's flagship product is Provantis, a data-management and workflow platform for non-clinical safety evaluation studies. Last fall, it launched Centrus, an enterprise data-integration and workflow package for early drug development.
Phil Reason, CEO of Instem, told BioInform that the company initially plans to integrate BioWisdom's tools with the newly launched Centrus product in order to add an information-extraction capability to the workflow automation system.
He noted that the company's customers — who include seven of the top ten global pharma firms — use Centrus to automatically compile massive amounts of preclinical data for regulatory submissions. The "next desire" for these customers, he said, "is to not just get that automated and into the hands of regulators, but get it into a framework where they can mine and extract knowledge from it."
Rather than develop such a capability internally, Reason said, the company decided to "acquire what BioWisdom has got already."
BioWisdom's Baxter described Instem's technology as complementary to that of BioWisdom's, and said that BioWisdom's technology will expand the scope of Centrus "from regulated into non-regulated information" as customers extract information that could inform future discovery projects.
Likewise, whereas BioWisdom has "traditionally been doing unregulated data-mining," the company is "interested in bridging from non-regulated to highly regulated, rigorous data."
Even though the two firms both focus on the pharmaceutical market, the fact that they've to date focused on different phases of the drug-development pipeline presents an opportunity for each company to grow its current customer base, Reason said.
For example, AstraZeneca is currently a customer of both firms. Reason said that researchers at the company have "a real appetite" for better methods to "extract information from legacy toxicology reports that have originated with data collected with Provantis."
These researchers would like "to drill down into the underlying data and help connect that with what's already been extracted as knowledge with BioWisdom," he explained.
He added that he recently spoke to a "heavy user of SRS" at Novo Nordisk who "knew of people within the company using Provantis, but never heard of Instem." Acknowledging that "people on the genomics side are usually separate from the safety assessment people," he said that once he explained the companies' plans to integrate their offerings, the researcher was "totally on board."
Instem has more than 9,500 users of its software at more than 80 customer sites. It said that the addition of BioWisdom will bring it 50 new clients and give it a presence in "all of the world's top ten pharmaceutical companies and 16 of the top 20."
Baxter noted that Instem will continue to support all of BioWisdom's products following the acquisition, including SRS and OmniViz. He said that the company has "seen no sign of any decline" in sales for those products and considers them to be an "opportunity to add further value for Instem."
In particular, he said, SRS has "already moved out from its traditional focus in classical bioinformatics and genomics and is now a powerful information-channeling engine" that serves as a "fundamental powerhouse" behind the Safety Intelligence Program.
He added that the companies have had many discussions with customers that suggest there will be "lots of interesting touch points" between their product offerings. "We expect that there will be many commercial opportunities with little development requirement," he said.
The companies have not yet settled on a product integration roadmap, but Reason said that they will likely first integrate OmniViz with Centrus in order to help customers visualize data compiled using the Standard for Exchange of Non-Clinical Data, or SEND, a standard developed by the Clinical Data Interchange Standards Consortium for non-clinical data collected from animal toxicology studies.
Beyond that, the next steps will "probably be areas around work AstraZeneca has been doing — that ability to complement high-level work with the granular detail we can provide."
Eyeing Additional Acquisitions
Last October, Instem went public on the London Stock Exchange's Alternative Investment Market, raising £9.15 million ($14.7 million) prior to expenses.
In documents filed prior to its IPO, the company said that it planned to use the proceeds from the offering to drive the organic growth of Provantis and Centrus and "make selective acquisitions which will strengthen its product offering in the [early development application] areas" — a market that the company has pegged at $500 million per year.
Specifically, the company said that it has identified more than 30 potential acquisition opportunities "and has shortlisted a number of these as key strategic targets."
Reason told BioInform that Instem will primarily be seeking "complementary vendors who service specialist labs in the discovery area," including pharmacology, pharmacokinetics, phase 1 trials, and safety assessment. In particular, he said, the company will be looking for tools that will help with "data acquisition in those vertical applications."
Instem reported £9.8 million in revenue for full-year 2009, an 11 percent increase over 2008 revenue of £8.8 million. It posted a £1.7 million profit for 2009.
Reason said that the company is not yet disclosing BioWisdom's expected contribution to future revenues because it is in a quiet period leading up to the release of its annual results for 2010, scheduled for March 22.
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